New SNP leader Yousaf urged to make the economy his priority

Tue 28 Mar 2023
Posted by: Richard Cree

Official portrait of Humza Yousaf

Humza Yousaf has won the race to succeed Nicola Sturgeon as SNP leader and become Scotland’s first minister, after defeating rivals Kate Forbes and Ash Regan in an acrimonious leadership contest.

Seen as the “continuity candidate”, Yousaf is likely to be confirmed as the first ethnic minority leader of a devolved government today (28 March), having secured a narrow victory by 52% to Forbes’s 48% in the second voting round.

Nicola Sturgeon has formally resigned her position, in a letter to the King this morning.

Following a divisive leadership campaign, Yousaf called on the party to unite and pledged to kickstart a grassroots campaign “to win independence for Scotland”, reports the BBC.

His win was applauded by the Scottish Greens, currently in a power-sharing agreement with the SNP. That agreement could have collapsed if either of the other candidates had won.

Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT) will write to Yousaf to congratulate him on his election and his new position as first minister.

“One of his first priorities is to strengthen Scotland’s economy amid a cost-of-living crisis. Micro, small and medium-sized enterprises (MSMEs) are disproportionately affected by this crisis, which affects their ability to export. And yet exports are a key driver of economic growth. By supporting MSMEs, this negative cycle can be reversed. We’re looking forward to discussing how we can work with the Scottish government to support MSME exporters more closely.” 

New approach to independence

Although committed to Scottish independence, The Scotsman reports that Yousaf has distanced himself from Nicola Sturgeon’s plan to regard the next UK general election as a de-facto referendum. Instead, he has suggested that regional assemblies discuss the way ahead.

He has also promised a massive rollout of free childcare and a focus on the green energy transition, with Scotland pivoting away from oil and gas.

The Scottish government has said that the economy can use its oil and gas industry and heritage, building upon skills, technology innovation and experience to support the growth of the renewables sector and achieve its 2045 net zero emissions target.

Green growth

In January, the Scottish and UK governments confirmed that Inverness and Cromarty Firth Green Freeport and Forth Green Freeport had been chosen as Scotland’s freeports, which are expected to attract £10.8bn of private and public investment and create more than 75,000 new, high-skilled jobs.

The economy will be a challenge for the new SNP leader, with The Times reporting that Scotland narrowly avoided dipping into recession in the last three months of 2022.

The Economics Observatory reports that Yousaf faces several economic challenges related to growth, an ageing population, regional inequality and the transition to net zero.

Analysis by the Committee on Climate Change shows that, despite its ambitious targets to reduce emissions, Scotland is set to miss these targets unless urgent action is taken.

Economic challenge

Economic viability could also hinder the SNP’s goal of Scotland joining the EU, according to the Spectator, as it will likely have to get its deficit closer to 3% of GDP compared with its current 12%.

The National reports that on the campaign trail Yousaf outlined a list of five things Scotland could do differently as an independent country, including changing energy policies that link the prices of electricity and gas, which he said was a “key driver” of high utility bills.

Using oil and gas revenues and the new borrowing powers afforded by independence would contribute to a £20bn national fund to invest in housing and renewables, he said.

He also pledged to pass laws to help workers buy-out businesses at risk of closure.

His plans imply a high taxation economic regime, The Telegraph reports, and he wants to create a “well-being economy” in which trade unions have more input into government policy.

Business reaction

Gordon MacIntyre-Kemp, the chief executive of Business for Scotland and the founder of the grassroots independence campaign group Believe in Scotland (BiS) told the National Yousaf’s election was “a chance for the SNP to reset its recently strained relationship with the Scottish business community”.

“Independence support will only rise if we campaign and focus the nation’s thinking on the benefits of independence versus the irreversible decline of Brexit Britain,” he said.

The FT reports that Nicola Sturgeon was felt to favour the public sector over the private, and while Yousaf has said he would seek to support small business, his policy priorities also remain centred more on public services.

Chief executive of the Scottish Chambers of Commerce, Dr Liz Cameron, warned that there were “serious challenges in every sector across the economy”, reports the Herald.

“The cost of doing business, labour shortages, lagging infrastructure, are all drags on growth and investment,” she said.

“We urge Humza Yousaf to take a pro-business approach with a new cabinet, to help build a build a globally competitive economy and to truly back Scottish business.”

In his efforts to reunite the SNP, Yousaf may have to offer his defeated rival, the pro-business, more centrist Kate Forbes, a powerful role, possibly an upgrade from her current role as finance and economy secretary to deputy first minister, the BBC claims.